Although 2005 was a largely positive year for PR agencies across the board (see Top 150 Consultancies, PRWeek, 21 April), PRWeek's first Top 50 Consumer Consultancies league table shows the picture for consumer specialists was less glowing.
For those consultancies where consumer PR contributes more than 90 per cent of fee income (18 in the Top 50), average growth was 19 per cent. At first glance, this is on a par with last month's Top 150 Consultancies report in terms of independent shops, those based outside London - and the first 50 agencies in that league. However, after one has removed the five companies that posted more than 30 per cent growth - Shine, Ptarmigan, Taylor Herring, Brazen and Wild Card - the figure is a more representative, and results in a less impressive average of eight per cent.
Some readers may be surprised to see the table topped by public sector specialist Geronimo Communications. However, £5.7m of its fee income (65 per cent of its total) is derived from specifically consumer-facing campaigns.
While Geronimo had a year of stellar growth, a look further down the table shows that outside the top ten, many consumer specialists saw virtually unchanged income performance on 2004: Nexus Communications, Ptarmigan, Purple PR, Coleman Getty, EHPR, Brahm, Cameron PR, BGB Communications, Henry's House, Kaizo, Focus PR and Firefly Communications are just some of those whose growth has been negligible.
Haslimann Taylor (19th), which counts 96 per cent of its business as consumer PR, registered total fee income growth of just 0.5 per cent, while Sputnik Communications (30th) and Camron PR (24th) - both of which are 100 per cent consumer PR - recorded an income dip of ten and two per cent respectively.
'FMCG and retail are tight markets and there's a lot of competition, putting clients under pressure,' says Mike Morgan, CEO of second-placed The Red Consultancy. Red's business is 64 per cent consumer, and although 2005 was its 11th year of unbroken growth, total UK PR income rose only three per cent to £8.9m. Morgan partly attributes this modest growth to last year's diversion of building Red's US operation. He cites only one area of real growth - 'consumer services' - where Red's clients include Yellow Pages, the AA and online travel shop Expedia.
Other agencies thrived despite the tough market (see profiles p29 and 30). Lexis PR (fourth), which is nearly 80 per cent consumer-led, enjoyed a 21 per cent increase in fee income to over £5.6m. Client wins included eBay Motors, Norwich Union and The Discovery Channel. Unilever, for which Lexis has worked on brands such as Dove, also handed the agency its Persil business last year.
Lexis chief executive Hugh Birley contends that one reason for the strong performance was the consultancy's capacity to offer additional services beyond basic PR. This included, for example, using its healthcare expertise to advise food clients, such as pizza company Domino's, on communications strategy around healthy eating. 'Anybody involved in food is taking health issues more seriously and moving from lip service to action - and that's good for us,' says Birley.
Sixth-placed Cake, meanwhile, began 2005 without a head of PR, planning director or financial director. Chris Wood, former director of Communique PR London, joined Cake in August to oversee PR operations - in what is described by agency CEO Mike Mathieson as 'a year of major business reorganisation'. Cake's PR income grew by 4.5 per cent, but Mathieson maintains that the effect of client wins in the second half of 2005 will be seen more clearly in next year's results. These wins included Motorola, Ben & Jerry's and Bacardi - as well as projects for Sony Walkman and Jaguar.
Cake's main assignments for 2005 though were the launch of the Nintendo DS console, the rollout of Motorola's ROKR mobile phone, and promotion of Carling's involvement with music. 'Our biggest growth area was our Digital Department - in online PR, seeding and brand auditing, and viral marketing,' says Mathieson.
Frank Public Relations (14th), winner of PRWeek's Consumer Marketing Communications Campaign award in 2005 for its work with HP Sauce, had an impressive year, nearly doubling PR income from £1.4m to £2.3m. The firm, which is 100 per cent consumer,
also joined Unilever's roster for the first time, gaining work for deodorant brand Sure.
Chairman Graham Goodkind describes one trend as 'the rise of the retained project client'. He explains this as clients continuing to seek the security of long-term agency relationships, while spending their money in more targeted ways rather than on monthly retainers. He cites mobile phone operator 3 (which also works with Lexis and Slice PR) as typical of this trend. Goodkind suggests such working relationships will present challenges to agencies in terms of resource management and financial planning.
Lack of competition
Elsewhere, entertainment specialist Taylor Herring (21st) boosted its fee income by 49 per cent to more than £1.5m. Last year it launched a 'brand comms' division to manage marques such as electronics firm Pioneer, using some of the same techniques it traditionally applies to celebrities such as Robbie Williams, to approach mainstream media.
Work last year included the launch of the More 4 spin-off for Channel 4, while its books are packed with broadcasters and TV production companies, including Talkback Thames and Big Brother maker Endemol.
'It's bizarre that the Hill & Knowltons and Porter Novellis of this world don't have entertainment divisions,' says Taylor Herring joint managing director James Herring. 'We never come up against them at pitches. It is fortunate to have very little competition, but we are not getting complacent.'
Growth was harder to come by at travel specialist BGB Communications (26th), whose consumer revenue represents more than two thirds of its total income. Fees rose by a modest 6.6 per cent. Director Helen Coop says tight margins in the travel sector have led to repitches where clients are seeking to prune costs - in other words, wanting the same level of PR support but at a reduced price. With consumers more and more turning to online outlets for their travel purchases, Coop says clients sometimes struggle to appreciate the role of PR in improved sales performance, especially that which involves print media - i.e. linking print campaigns to online sales. However, BGB did win briefs, including Tourism Malaysia and Thomsonfly.
Despite reports of a lift in consumer confidence since the start of 2005, concerns about the level of consumer debt and the pensions crisis encourage few to predict a boom in the sector. But as ever, PR practitioners are cautiously optimistic for the year ahead.
Unlike the Top 150 Consultancies report, the firms listed here do not include Sarbanes Oxley-affected agencies because it is not possible to ascertain their income breakdown.
TOP 50 PROFILES
MIDAS PR (42) - £1,122,744 (Consumer fee income to year ended December 2005)
Formed in 1990 to service the publishing industry, Midas PR's areas of expertise now encompass the arts, awards, media, home entertainment and music.
Fee income in 2005 was up 18 per cent to £1.12m, of which around 80 per cent - £900,000 - came from consumer work. However, according to joint MD Steven Williams, consumer growth was less than ten per cent. 'We work in super-niche consumer areas, so it is difficult to gain double-digit growth,' he says.
New clients for 2005 included the inaugural Financial Times/Goldman Sachs Business Book of the Year Award, Private Eye, Borders and The Royal Festival Hall. In addition, the agency promoted Universal Pictures' limited edition DVDs of work by Bing Crosby, Richard Pryor and Hunter S. Thompson.
As publishing accounts tend to get awarded on a book-by-book basis, the agency is not technically retained by any of the big publishing houses. 'It's all swings and roundabouts, where we might do five projects for a publisher one year and then just one the next,' explains Williams.
However, significant projects last year included Michael Winner's autobiography Winner Takes All (for Robson Books), and Behind Closed Doors, an autobiography by Jenny Tomlin, Martine McCutcheon's mother (for Hodder & Stoughton).
The agency also built on its personal PR portfolio - gaining clients such as fitness guru Joanna Hall - and diversified into publishing services, picking up e-publisher The Friday Project and US self-publishing firm AuthorHouse.
Long-standing clients include the London Book Fair and the British Book Awards. Midas has promoted the latter for eight years and in 2004 helped negotiate a deal that brought Cactus Television and Channel 4's Richard & Judy on board.
For last year's British Book Awards ceremony, the agency organised an event to announce the shortlist with Richard and Judy. It also set up an exclusive interview with The Da Vinci Code author Dan Brown, and arranged for Hollywood actress Emily Mortimer to present the Lifetime Achievement Award to her father, John.
At the beginning of 2005, the agency formalised its long-standing partnership with Jacks Thomas, former Readers' Digest European director of comms, who became joint MD. This year, the agency is seeking PRCA accreditation.
At a glance:
Best-performing areas of business in 2005: Consumer books; awards
Top three client wins: Financial Times/Goldman Sachs Business Book of The Year Award; Universal Pictures; Sterling Publishers
Best hire in 2005: Joint managing director Jacks Thomas fromReaders' Digest
Expected consumer fee income in 2006: £1.08m
Plans for 2006: To make two senior appointments. To further develop online strategy for B2B and consumer growth. To improve arts awards and events status.
WILLOUGHBY PR (46) - £1,230,936 (Consumer fee income to year ended December 2005)
Last year Birmingham-based Willoughby PR earned around two thirds of its fee income (£827,000) from consumer work.
On the back of a two-year relationship with Sharps Bedrooms, wins included Dolphin Bathrooms and Moben Kitchens, both part of the HomeForm Group. Likewise, work for Glen Dimplex Home Appliances led to Willoughby gaining the account for the firm's newly acquired LEC Refrigeration.
'2005 was Willoughby's best year for consumer growth,' says chief executive Julia Willoughby, who puts organic growth at five per cent and claims consumer fees increased by 19 per cent on the previous year.
Long-standing activity for Birmingham's Bullring shopping centre resulted in a successful pitch for The Shires Shopping Centre in Leicester, while other new accounts included discount retailer T J Hughes, Mothercare and Eaglemoss Publishing's Dairy Diary.
'We also saw the launch of home retail sites as brands tried new routes to market,' adds Willoughby. Such retailers included furnishing specialist SamuelHome and furniture and tableware supplier Glassdomain.com.
The agency has made senior appointments over the past 18 months, including Jeremy Merckel who joined as account director from Citigate Smarts, and Catherine Keep, who was appointed to head a new Nottingham office in August. Meanwhile, Claire Jewitt joined from Consolidated Communications as senior account manager to work on consumer brands.
The agency lost one account in 2005 - landscaping and outdoor living specialist Forest Garden. However, Willoughby says this was a result of internal restructuring at the client.
Award-winning work comprised an integrated campaign to promote Miller Homes, which involved setting up a 'Place to Chill' in shopping centres - offering reflexology and massage. It was also recognised for the launch of Stoves' Genus appliance, which cooks food in half the time of conventional ovens. The agency rolled out a new variant for client of ten years WKD, working alongside fashion retailer USC.
Willoughby says future growth in the consumer sector will evolve around her agency's events, promotion and sponsorship division, Space. She adds that Willoughby must 'set clear media and events
targets before starting campaigns, with a thorough evaluation programme - which is what clients really want'.
At a glance:
Best-performing area of business in 2005: Home lifestyle
Top three client wins: Dolphin Bathrooms; Lec Refrigeration; Mothercare
Best hire in 2005: Catherine Keep as associate director from The East Midlands Development Agency
Expected consumer fee income in 2006: £750,000
Plans for 2006: To build on retail and consumer lifestyle experience. To branch out further into internet shopping, destination marketing and consumer technology. To increase home/garden accounts.
TOP 50 CONSUMER CONSULTANCIES 2006, and their respective Consumer fee income
01. Geronimo Communications: £5,769,205
02. The Red Consultancy: £5,665,373
03. Edelman: £5,183,015
04. Lexis PR: £4,492,668
05. Golley Slater PR: £4,197,556
06. Cake: £3,506,000
07. Consolidated Communications: £3,350,034
08. Exposure Promotions: £3,326,250
09. Lansons Communications: £3,215,618
10. Harrison Cowley: £3,205,365
11. Shine Communications: £2,771,060
12. Halpern: £2,739,517
13. Nexus Communications Group: £2,384,000
14. Frank PR: £2,300,749
15. Ptarmigan Consultants: £2,129,967
16. Purple PR: £1,844,800
17. Attenborough Associates: £1,761,310
18. Colman Getty PR: £1,617,600
19. Haslimann Taylor: £1,570,370
20. EHPR: £1,553,746
21. Taylor Herring: £1,543,284
22. Brahm PR: (est) £1,500,000
23. Brazen: £1,450,620
24. Camron PR: £1,445,330
25. The Big Partnership: £1,419,742
26. BGB Communications: £1,381,147
27. Henry's House: £1,210,256
28. Grayling: £1,203,650
29. Trimedia Communications: £1,192,763
30. Sputnik Communications: £1,163,030
31. Wild Card: £1,095,136
32. August.one Communications: £1,093,700
33. Darwall Smith Associates: £1,081,142
34. Kaizo: £1,034,072
35. Firefly: £1,026,000
36. Freshwater PR: £1,009,040
37. Primal PR: £1,007,767
38. Cow PR: £980,947
39. Kavanagh Communications: £959,546
40. Phipps PR: £949,063
41. Icas PR: £937,000
42. Midas PR: £900,000
43. Barrett Dixon Bell: £880,000
44. PFPR Communications: £860,239
45. Storm Communications: £828,000
46. Willoughby PR: £826,948
47. Focus PR: £810,601
48. Launch Group: £788,263
49. Nelson Bostock Communications: £780,443
50. Haygarth PR: £759,440
All figures relate to year ended December 2005. Fee income=PR fees plus mark-up. All figures are gathered from forms submitted to PRWeek for Top 150 Consultancies report (21 April)